The Supreme Court of India, comprising a Bench of Justice Dipankar Datta and Justice Sheel Nagu, has granted regular bail to public servant Shubhanshu Dixit and private individual Sanjay Badaya in connection with alleged financial irregularities in the execution of the Jal Jeevan Mission in Rajasthan. Deciding the criminal appeals against the rejection of their bail pleas by the High Court of Judicature for Rajasthan, Bench at Jaipur, the Court held that personal liberty under Article 21 of the Constitution must be safeguarded when a trial cannot reasonably conclude in the near future, observing that continued pre-trial detention cannot serve as punitive punishment.
Background of the Case
The proceedings arise from Preliminary Enquiry No. 06/2024 dated 18th January, 2024, which culminated in the registration of FIR No. 245/2024 on 30th October, 2024, at Police Station, Anti-Corruption Bureau (ACB), Jaipur. The FIR invoked Sections 7(c), 9, 10, 13(1)(a) read with Section 13(2), and Section 12 of the Prevention of Corruption Act, 1988 (as amended in 2018), along with Sections 409, 466, 467, 468, 471, 477-A, and 120-B of the Indian Penal Code, 1860.
According to the prosecution, the case relates to a conspiracy and financial irregularities within the Public Health Engineering Department (PHED), Rajasthan, concerning the “Jal Jeevan Mission”—a joint initiative of the Central and State Governments to provide functional household tap connections. It is alleged that two private firms, M/s Shri Ganpati Tubewell Company and M/s Shri Shyam Tubewell Company, acting in connivance with senior public servants and intermediaries, relied on forged work-experience and completion certificates purportedly issued by IRCON International Limited. Using these documents, the firms obtained eligibility and were awarded work orders for approximately 104 tenders valued at Rs. 979.45 crore, causing wrongful loss to the State exchequer.
Following investigation, the ACB filed Chargesheet No. 80/2026 on 12th April, 2026, and Supplementary Chargesheet No. 80-B/2026 on 29th June, 2026, naming the appellants as accused alongside others. The prosecution listed 124 witnesses and voluminous documentary evidence running into thousands of pages.
Regarding the specific roles alleged:
- Shubhanshu Dixit: A public servant who served as Secretary of the Rajasthan Water Supply and Sewerage Management Board (RWSSMB) from 30th December, 2022 to 13th February, 2024, and de facto Secretary of the PHED Finance Committee. The prosecution alleged that he suppressed whistleblower complaints and legal notices regarding the forged certificates, participated in committee meetings approving the bids of the tainted firms, and issued meeting minutes facilitating tender awards. He was arrested on 17th February, 2026.
- Sanjay Badaya: A private individual alleged to have acted as an intermediary and broker on behalf of the then PHED Cabinet Minister, Mahesh Chandra Joshi. The prosecution claimed that despite having no official post, he exerted influence over tender files, inquiries, and engineer transfers/postings, collected cash bribes from contractors, and routed bribe funds through accounts of relatives and acquaintances into M/s Sumangalam Landmark LLP, a firm owned by the Minister’s son. He was arrested on 11th May, 2026.
Both appellants challenged the High Court orders dated 1st June, 2026 (for Dixit) and 13th August, 2026 (for Badaya), which had dismissed their regular bail applications.
Arguments of the Parties
Learned senior counsel appearing for the respective appellants prayed for the grant of regular bail, highlighting that the investigation against them was complete.
Opposing the appeals, learned counsel for the State of Rajasthan argued that economic offences involving deep-rooted conspiracies must be viewed with utmost seriousness and that the gravity of the offences justified the continued detention of both appellants and the denial of bail.
The Court’s Analysis
The Bench observed that while economic offences involving deep-rooted conspiracies must be treated seriously and the State was justified in opposing bail, other material features of the case could not be ignored.
The Court noted: “While we have no hesitation to agree with learned counsel for the State that economic offences having deep-rooted conspiracies must be viewed seriously, and the State is justified in opposing the prayer for grant of bail to the present appellants, however, sight of the other features of the present case cannot be lost. The investigation qua the present appellants is complete, and chargesheets have since been filed. The prosecution’s case predominantly rests on documentary records and electronic trails. Since these materials are already seized and in the safe custody of the investigating agency, the apprehension of tampering with evidence is substantially obliterated.”
The Court further underscored that the proceedings were at a nascent stage with charges yet to be framed, pointing out that investigation against certain accused persons remained pending, two accused were absconding, and sanction under Section 19 of the Prevention of Corruption Act was granted only on 6th September, 2026, for six other public servants. Given the 124 witnesses to be examined and thousands of pages of records, the Bench observed that the trial was bound to be protracted.
Reiterating the constitutional principles governing custody, the Bench held: “It is a well-settled postulate of criminal jurisprudence that pre-trial incarceration cannot masquerade as punitive detention, particularly when the commencement and conclusion of the trial are not imminent. This Court must intervene to safeguard the right to personal liberty under Article 21 of the Constitution of India when a trial cannot be reasonably concluded in the near future.”
The Bench also noted that co-accused Arun Srivastava had already been granted bail by the High Court on 1st June, 2026, and the principal political executive, former PHED Minister Mahesh Chandra Joshi, had been enlarged on bail by the Supreme Court on 3rd December, 2025 (2025 SCC OnLine SC 2633) in the corresponding PMLA case.
Decision of the Court
Holding that no fruitful purpose would be served by further pre-trial detention, the Supreme Court allowed the appeals and set aside the impugned High Court orders dated 1st June, 2026, and 13th August, 2026.
The Court directed that Sanjay Badaya and Shubhanshu Dixit be released on regular bail, subject to furnishing bail bonds to the satisfaction of the Trial Court along with other appropriate conditions. The appellants were directed to join the investigation if summoned by the investigating officer and to diligently attend trial proceedings. The Trial Court was granted liberty to cancel bail in the event of unjustified non-appearance or breach of conditions.
The Bench clarified that it expressed no opinion on the merits, the specific roles of the accused, or the evidentiary value of the prosecution materials, leaving all such questions open for independent adjudication at trial.
Case Title: Sanjay Badaya v. State of Rajasthan (with Shubhanshu Dixit v. State of Rajasthan)
Case No.: Criminal Appeal No. [—] of 2026 (Arising out of SLP (Crl.) No. 15347 of 2026 with SLP (Crl.) No. 13461 of 2026)
Bench: Justice Dipankar Datta and Justice Sheel Nagu
Date: September 29, 2026
